Short term bullish but RSI comes out overbought

• Silver hits higher highs as short-term uptrend favors longs.
• Silver has just broken out of overbought on rising odds of a pullback RSI.

Silver (XAG/USD) is making higher highs and higher lows as it moves higher on the 4-hour chart. This suggests that the commodity is likely in a short-term uptrend, and since “the trend is your friend,” the odds favor a continuation of that trend higher.

4 hour silver chart

Silver has just breached a key long-term support and resistance level at $28.71, and this further confirms its short-term bullish trend.

The precious metal is now close to the August 2 high at $29.23, where it will encounter further technical resistance, however, given the near-term uptrend, it will likely break the resistance eventually and continue higher.

Beyond that, upside targets lie at $29.44 (July 24 high) and $30.59 (July 18 high).

The Relative Strength Index (RSI) has just broken out of overbought, indicating an increased chance of a pullback. Such a correction could see silver temporarily return to $28.71 or possibly even support $28.52 (for the August 15 high).